competitive assessments: understanding what the

Competitive Assessments: Competitive Assessments: Understanding What the Understanding What the

Competition Will BidCompetition Will Bid2002 SCEA National Conference and Training Workshop2002 SCEA National Conference and Training Workshop

Frank R. FlettFlett and Associates

1830 N. Atlantic Av., C-605

Cocoa Beach, FL 32931

(321)-868-2156

www.competitiveassessments.com

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AgendaAgenda

BackgroundThe Competitive Assessment Process

– Identifying customer needs– Self assessment– Competitor intelligence– Strategy selection

Winning Price

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SCIPSCIP

Society of Competitive Intelligence Professionals (SCIP): www.scip.org– Founded in 1986

Serving professionals engaged in the collection, analysis, and management of information on competitive and business strategies– A global community of “CI” professionals

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SCIP Code of EthicsSCIP Code of Ethics

To continually strive to increase the recognition and respect of the profession

To comply with all applicable laws, domestic and international

To accurately disclose all relevant information, including one’s identity and organization, prior to all interviews

To fully respect all requests for confidentiality of information

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SCIP Code of Ethics (cont.)SCIP Code of Ethics (cont.)

To avoid conflicts of interest in fulfilling one’s duties

To provide honest and realistic recommendations and conclusions in the execution of one’s duties

To promote this code of ethics within one’s company, with third party contractors and within the entire profession

To faithfully adhere to and abide by one’s company policies, objectives, and guidelines

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Competitive Assessment ProcessCompetitive Assessment Process

RequestFor

Proposals

GatherIntelligence

CompetitiveAssessment

SelfAssessmentStrengths

And Weaknesses

Win Strategy

Proposal Themes,Features and Benefits

CompetitionDatabase

ActionPlan

Identify andValidate

MIRs

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Information NeedsInformation Needs

You must have marketing intelligence on:

Your customer(s)

Yourself

Your competitors

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Everyone Is Involved Everyone Is Involved In Data CollectionIn Data Collection

Winning strategy depends on excellent information network– capture team members– business development staff– field representatives (yours and other companies’)– management– teammates and suppliers

Develop alternate sources to:– correct communications errors– remove biases, opinions, inaccuracies– increase sample size (and confidence)

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Who Is the Customer?Who Is the Customer?Everyone in the two organizations involved

in buying and operating– the acquisition agency– the user community

Learn everyone’s roles and authority in:– defining requirements– deciding program strategy– deciding selection strategy

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Customer RequirementsCustomer Requirements All customer requirements are real but do not

necessarily have the same importance– Compliance Issues

“must haves” which all offerors comply with but don’t produce differences among proposals

compliance is a necessary but not sufficient condition to winning

– Discriminators more than the requirement, lower risk approach, etc. result from an assessment against the customer’s Most

Important Requirements (MIRs)

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More on MIRs More on MIRs MIRs are needed to assess our competitors

(and ourselves!) MIRs for a program in formulation can be

synthesized through regular contact with the program office

Explicit MIRs appear in:– Commerce Business Daily synopses– Draft RFP Section M– Final RFP Section M

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MIRs: Evolution and SourcesMIRs: Evolution and Sources

CBD

Customer Contacts

Libraries Draft Documents:

Competition SOO

Teammates Statement of Work Final

Trade Associations Sections L & M L&M

Seminars Specifications

Journals

Pre-RFP Draft RFP Final RFP

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Identifying MIRsIdentifying MIRs

MIRs

Compliance Issues

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Self-AssessmentSelf-AssessmentSee yourself as others see youUtilize unbiased, objective sources

– Customers– Other companies– Consultants

Resist the tendency to over-emphasize what you perceive to be your strengths– The customer will be the judge

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Intelligence on OurselvesIntelligence on Ourselves What do we bring to the party? Why should the customer want us?

– unique technical solution– low risk approach– affordable cost– domain expertise– good past and present performance– system and software engineering processes– skills to manage complex teams

Don’t drink your own bath water!!

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Example of Unique ApproachExample of Unique Approach “We will deliver the Core Operational Capability

(COC) at the first site six months ahead of schedule”– benefit: “our approach could save $1M in O&M costs

on current system as a result of early cutover”– credibility: “we will prove during our proposal

demonstration that, for us, COC exists today”– competition: (unsaid) we know he does not have a COC

capability available until mid-2002, which will barely allow him to meet the required delivery

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Competitor IntelligenceCompetitor Intelligence Company Data

– Annual reports– Capabilities statements– Trade shows, exhibits, and other presentations

Public data– Dunn and Bradstreet– Government reports– Business libraries– Trade magazines and newspapers– FOIA requests– Source selection debriefings

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Competitor Intelligence (cont.)Competitor Intelligence (cont.)Interviews (face-to-face or telephone)

– Employees and ex-employees– Customers– Teammates– Consultants

Internet searchesSearch services (e.g., LEXIS-NEXIS)

Competition databases

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Competitive IntelligenceCompetitive Intelligence

INSTINCT

INTERVIEWS INVESTIGATIONS

COMPANY DATA PUBLIC DATACOMPETITION DATABASE

LUCK5%

CREATIVEDIGGING

15%

BASIC DATA COLLECTION

80%

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Competitive Assessment Competitive Assessment SessionSession

Involve any and all with knowledge of the competition

Use some sort of scoresheet– maintains focus– provides documentation

Look at strengths and weaknesses of both self and competitors vs. customer MIRs– must be done from customer perspective– must be honest and objective

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Competitive Assessment Competitive Assessment WorksheetsWorksheets

Most Important Requirements (MIRs) MIR 1 MIR 2 MIR 3 MIR 4

Company X

Company Y

Company Z

Self

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Scoresheet LegendScoresheet Legend

+ Distinct advantage when assessed

against MIR

0 No advantage or disadvantage

- Distinct disadvantage when

assessed against MIR

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MIR Shoot-Out SummaryMIR Shoot-Out Summary

MIR 1 2 3 4 5 6 7 8

X

Y

Z

Self

Comments:

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Action Required If...Action Required If...You are a “-” anywhereYou are a “0” and the competitor is a “+”

Also

If you are a “+”, how do you stay there?

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Assessment of Strengths Assessment of Strengths and Weaknessesand Weaknesses

Competitor is a “+” and you are a “0”

1. Make yourself a “+”

2. Make your competitor a “0” or a “-” How?

1. Customer requirements change

2. Teaming

3. IR&D or investment

4. What else?

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Influencing the CustomerInfluencing the Customer• Before formal RFP release, you have the

opportunity to interface with your customer:• Draft RFPs• Electronic Bulletin Boards• Bidder’s Libraries

• Watch how the solicitation package changes• Based on your inputs• Based on your competitors’ inputs

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Improving Features Improving Features and Benefitsand Benefits

Rethink solutions and strategies– revisit alternatives and trade studies– review teaming alternatives

Reshape customer’s perceptions– revise MIR order of importance– make cost the “most important” MIR– ghost the competitors’ likely solutions

Reassess your ability to compete– can you ever get better?

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GhostsGhosts Bring to bear the power of Negative thinking! If effectively raised and the competition hasn’t

thought of it and/or countered it, he gets hurt Bring up the ghost, then show that the same ghost

is not in your approach:– “An offeror that does not share our emphasis on

personnel recruitment, training and retention runs the risk of high turnover rate; for the last four years, we have demonstrated the best white-collar retention rate in our industry.”

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GhostbustersGhostbusters Tackle your own problems head-on

– never ignore a weakness or deficiency– your customer and/or your competitors will know

Devise methods to correct the shortcomings– “Because we experienced some throughput difficulties

on the XYZ project, we invested $500K of our own funds to upgrade our bench test facility in order to protect the aggressive delivery schedule required on this effort.”

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Reducing RisksReducing Risks Educate the customer on your approach

– white papers, briefings, visits IR&D or investment Demos, simulations, prototypes Fix customer perception of problems Initiate/complete contract tasks prior to award

– accelerates schedule– proves technology– enhances proposal credibility

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No Stone Unturned!No Stone Unturned! Winning strategy includes:

– some or all of the above– what’s left?

take competition off the street buy competitor(s) leverage off other programs spend to win accelerate or delay RFP what else?

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Action PlanAction Plan Identify required actions Designate a single person responsible for closure

of each action item Establish schedule and cost for each item Spell out expected result of each item Develop the “Action Plan” Tie plan to MIRs, win factors, strategies

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Go-No Go QuestionsGo-No Go QuestionsWhat gaps do we still have in technology?What gaps do we still have in personnel?What gaps do we have in experience?Who do we have to beat to win?

We know and acknowledge that we are either the front-runner or else a lesser competitor with a lower probability of win.

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Learn From Your ExperiencesLearn From Your Experiences Why did we lose? Why did we win? Why did we get tossed out of the competitive

range? Why did we make the “short list” but not the final

cut? Did we make cost and/or technical mistakes? Did we fail (again!) to correctly size up the

competition?

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Corrective ActionsCorrective Actions Fix customer perceptions

– either they were wrong or you have a problem Team with winners

– a piece of the pie is better than no pie at all! Bid more selectively

– were you ever a legitimate contender? Improve and intensify the marketing intelligence

acquisition process– prompt, positive adjustments to behavior

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Winning Price…..Winning Price…..

Is a function of:– The competitors’ likely bid prices– The customers budget and his view of “best

value”– The evaluation criteria and cost realism

Remember: there is such a thing as

being “too low”

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Price-to-Win (PTW) AnalysisPrice-to-Win (PTW) Analysis

Top-down estimating that is based upon knowledge of:– the competitors’ past pricing behavior– current market conditions

Relies heavily on data from recent contract awards for same/similar products or services– but, does not merely use history as a predictor of the

future– requires analysis of today’s environment and its likely

impact on pricing strategies

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Top-Down vs. Bottoms-UpTop-Down vs. Bottoms-Up

PTW analysis is allocated to the WBS items Bottoms-up cost proposal usually results in

numbers higher than the “bogeys”– Re-verify total PTW– Reassess allocation of the PTW to the WBS– Revise technical/management approach– Continue to iterate the bottoms-up

Either reconciliation is not achievable (and it may be time to fold) or the basis of estimate can be made to support the top-down “bogeys”

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Iterating the Bottoms-UpIterating the Bottoms-Up

Challenge those areas that don’t reach their “bogey” - accept only reasonable and justified estimates

Get the lowest supplier prices possible and maintain competition amongst vendors

Conduct design trade-offs: repeat, adjust, repeat Don’t accept the excuse that “this is the way

we’ve always done it.”

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Basis of EstimateBasis of Estimate

Base DataJudgement

FactorsEstimateRationale

SupportableCost Estimate+ + =

Four key questions must be answered:1. What is the base data that was used?2. Why is the base data relevant?3. What adjustments were made to the base data?4. Why are the adjustments appropriate?

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Competitive Assessment....Competitive Assessment....

Selected Strategy

Technical Price

Superior

Competitive

Minimum

Acceptable

Competitive

Lowest

Credible

Lowest

Customer MIRs

ProgramDefinition

Customer MIRs

ProgramDefinition

Our Options/Win Factors

Strengths &Weaknesses

Our Options/Win Factors


AcquisitionStrategy

Eval Criteria

AcquisitionStrategy

Eval Criteria

Competitors’Strategy/Price


Competitors’Strategy/Price
